Archive for July, 2008
This post was written in response to a post on http://www.philanthromedia.org and elaborates on the non-profit sector’s tendency to waste a lot of time in semantic squabbles, instead of concentrating on addressing the real issues.
“Volunteer” does not necessarily mean – “No Pay”, that fundamental fact is being ignored by huge segments of the non-profit sector, who ought to know better. “To Volunteer” means to take on a task that you are not required to do, and in many cases you will not be paid, (e.g. PTA board member, helping at a soup kitchen, being a an adult scout leader, etc. that lists goes on and on.
There are other times however, especially in the workplace, where one “volunteers” to take on a particular task, which the organization believes important, but it is not a direct responsibility of your job. This is also volunteering, and one huge example of this that does help the non-profit sector, are the men and women who volunteer to run the workplace giving campaigns in their respective organizations,whether for-profit or public. Each year in the Combined Federal Campaign has more than 250,000 volunteers across the country helping to raise $277 million for local, national and international charities.
Other examples of “paid volunteerism” include organizations that allow, and actually encourage their employees to go to local public schools for several hours a month to help there. They are not paid extra, but they are allowed the time away from their normal job duties. They are encouraged to do this for their personal and professional development.
The non-profit sector spends way too much time dickering about terminology issues – e.g. does “non-profit have a hyphen in it or not?” ;To be a “Pure Volunteer” they can’t be Paid – Can they be reimbursed for gas expenses? Or is that being “paid’?
With 1.4 million non-profits, there is no one right answer as to whether or not that non-profit needs volunteers, but the idea that “volunteer is synonymous for “no pay” is wrong.
Bill Huddleston, CFC Expert
This in response to an article in today’s New York Times: http://www.nytimes.com/2008/07/23/business/media/23adco.html
Workplace Giving – The Green Way to Give
In addtion to being the most donor friendly method of donating, workplace giving is also the one of the most enviromentally friendly. One catalog has 1500-3000 charities in it depending upon the region. How’s that for economy of scale.
In the CFC, it’s also delivered to every Federal employee in a particular region. How much would it cost you to send a postcard with a 25 word description of your non-profit to every Federal public servant who lives in your community?
Do the math, and then request my special report about some of the other hidden benefits of workplace giving.
Extremely Simple Low Hanging Fruit – Particularly for Schools
I for one actually believe in the “wisdom of crowds” and the basic goodness of people, and it’s in the realm of “donor education” where the non-profit sector has royally screwed up.
It’s spent the last 50 years convincing people that “program expenses” are good that “administrative expenses” (which I prefer to “overhead” it’s less pejorative) are bad, and now when I talk to fundraisers and executive leadership they bemoan how hard it is to get unrestricted funds.
Well, what do you expect when you spend half a century training your donors that this a bad idea?
The fact that workplace giving dollars are unrestricted is just one of the many benefits of the Combined Federal Campaign (CFC). To learn more, go to http://www.cfcfundraising.com and request the special report.
Here is an example of low hanging fruit, is a type of ‘donor education” that would not cost anyone an additonal dollar, but it would still have a huge impact.
At least in the Washington, DC area the majority of large grocery chains, Safeway, Giant, and at least one large department store (Target) have programs where you can sign up to support the schools in your region, where some small percentage of your purchases go to the school.
Many schools themselves have a pretty decent donor education message to the parents of their students, with step by step instructions on how to sign up, what the code is for their school, etc.
Where the school’s donor education falters however, is that there is usually not a good method for getting these instructions out to the broader community, including everyone who does not have kids in school.
If just 10% of the residents without kids in school would sign up for these programs, it would help out the school age children, and if you think your local school gets plenty of references, you can choose to support one in a different area.
It’s low hanging fruit, but since it’s not an issue of conflict, mainstream media will never report it, and schools in general don’t have ways to reach the broader community.
The non-profit sector needs a place to post these type of instructions, guidelines, etc. with step-by-step simple ways to make a difference.
Bill Huddleston, CFC Expert
The Combined Federal Campaign (CFC) and “Low Hanging Fruit”
On Seth Godin’s blog, he talks about the magic of “low-hanging fruit,” namely don’t miss out on the “easy pickings” while developing your latest, complicated multi-pronged, strategy. In the non-profit sector there is a tremendous opportunity to benefit from the “low-hanging” fruit of the Combined Federal Campaign (CFC).
The CFC is the Federal government’s workplace giving program, and it is the largest and most successful workplace giving program in the world. Through the CFC, Federal public servants give more than $250 million every year to thousands of local, national and international non-profits.
The CFC is first and foremost a vehicle for non-profit fundraising, and there are many other benefits to including it as one of the tools in your non-profit’s “Toolbox.” These benefits include:
● Generates a reliable, twelve month income stream of unrestricted revenue.
● More leverage and less risk than any other means of fund-raising.
● Leadership Development – organizing, planning, managing, etc.
● Public Speaking
● Market Research about your non-profit
● Development of multiple year income streams
● Increase of public awareness of your non-profit
Where the “low-hanging” fruit comparison comes in is that all of these benefits are generated by approximately 32% of the Federal workforce. With some attention to “basics,” and a little effort it is possible to increase this participation rate to at least 50%, if not 60%. This could double the amount raised to $500 million annually.
What basics? How about saying thank you?
The non-profit sector does a lousy job of saying “Thank you” to all the people who make the CFC successful, (and in terms of actual giving, if the CFC were a foundation, it would be the 10th largest in the USA).
There are three categories of people who deserve a “thank you” and in general, the CFC non-profits only thank one category – the identified donor.
The two other categories that deserve a thank you are the “anonymous donors” – this is a very popular feature for CFC donors, and the fundraising volunteers who plan, organize, manage and conduct the CFC campaigns each year. And yes, in the latter two categories the non-profit will not have the list of individual names, but it still possible to thank people in the following ways:
● On your website
● In your printed material (annual reports, special event programs, newsletters (electronic or print).
● In person at special events – “Thank Yous” from the Chair of the Event.
Bill Huddleston, CFC Expert
Here’s an example of political clout (or rather the lack of it) in action:
IRS mileage allowance for businesses:
58.5 cents per mile.
IRS Mileage rate for charities:
14 cents per mile.
My personal opinion is that it should be the same for both businesses and non-profits, it’s not as if gasoline costs less for charities, and I would urge you to make that argument.
I thought this message from the VANNO, (Virginia Network of Nonprofit Organizations) sums up very well an issue that affects all US charities. Read it, and contact your US Senators and Representatives.
Bill Huddleston, CFC Expert
The effort to increase the Charitable Mileage Rate is building momentum in Congress.
The issue came up in a recent House Ways & Means Committee mark-up. On Friday, 6/20/08 Congressman Platts and Petri sent a letter to House Ways & Means Committee Chairman Rangel requesting that they hold a hearing on H.R.2020 (Rep. Platts’ bill) and H.R.1827 (Rep. Petri’s bill). By Monday 6/23/08, the IRS announced that the Standard Business Mileage Rate will increase to 58.5 cents per mile for the second half of 2008. The Charitable Mileage Rate will remain at 14 cents.
Unlike the business rate which is variable and set by the IRS periodically, the Charitable Rate is fixed at 14 cents by § 170(i) of the Internal Revenue Code. While the business rate has steadily increased, but for a limited, Hurricane Katrina rate in 2005, the charitable rate has not increased in 10 years. With gas prices at $4.00 per gallon, it costs between 50 and 70 cents to drive a car one mile. As a result, nonprofits across the country are facing critical volunteer shortages. Raising the charitable rate, to the business rate, would grant relief to organizations who rely on volunteers that drive their personal vehicles for charitable service.
Both H.R.2020 and H.R.1827 would set the charitable mileage deduction at the same variable rate as the business rate. But there are minor differences between the bills. Both are currently in the House Ways & Means Committee. That Rep. Petri is working with Rep. Platts to request a hearing on this issue is a major step. The letter was signed by Representatives Platts [PA-19]; Boswell [IA-3]; Conaway [TX-11]; Miller [NC-13]; Putnam [FL-12]; Shays [CT-4]; Etheridge [NC-2]; Matsui [CA-5]; Shuler [NC-11]; Petri [WI-6]; Campbell [CA-48] and Foxx [NC-5]. Once Chairman Rangel respondse to the letter, we will assess our next steps. If a hearing occurs, VANNO may have an opportunity to testify. If this happens, it would be helpful to share stories from Virginia of organizations that would be directly and positively impacted by H.R. 2020.
1. Contact your members of Congress. Action Alert Urge their support for H.R.2020. H.R.2020 would simplify the tax code, provide equity between charities and for-profits, and remove the disincentive from those Good Samaritans in our society who help the less fortunate. Additional information is posted at http://www.pano.org/publicpolicy/publicpolicy-irs.php.
2. Contact your Senators: This issue will reach the Senate. We need a Champion & a strategy. S.403 and S.3032 only raise the charitable rate to a fixed 40 cents whether permanently or temporarily. But the price of gas is not expected to return to prior levels.
Ask your members, your coworkers and your board of directors whether they volunteer or use volunteers, and whether raising the charitable reimbursement rate would help. It might be worth mentioning that volunteer board members of a 501(c)(3) can deduct mileage as volunteers if they are not otherwise reimbursed.
This may be the best chance we have had to increase the charitable rate in over 10 years.
Executive Director, VANNO
MPA in NonProfit Management –
George Mason University
Author of soon to be released:
A Hidden Treasure for Your Non-Profit
How to tap into the CFC, America’s Largest Workplace Giving Campaign
Contact the Huddleston Consulting Group at
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The Seven Sins of the Nonprofit Sector
by Bill Huddleston, CFC Expert
1. They think the competition is other non-profits, rather than other discretionary spending, including $5 coffees and $100 T-shirts.
2. They preach cooperation, but when push comes to shove many don’t really believe in it, and they have no clue on how to accomplish it.
3. It believes in the scarcity mind-set, instead of the abundance mind-set – in a Brookings study a few years ago about non-profits in the Washington, DC region, the title and message was “Thin the Soup or Shorten the Line” – the possibility of raising more funds was never even mentioned as a possible approach!
4. It doesn’t know how to say thank you to all donors and all volunteers that help support it.
5. They have the 80/20 rule backwards, where they spend 80% of the time trying to get 20% of the money (grants), instead of using leverage to reach individual donors.
6. It doesn’t understand that by saying over and over, “nonprofits are businesses” it is sowing the seeds of in its own destruction. If as a non-profit all you are “is a business” what possible right do you have to argue that you shouldn’t be taxed like a business? If on the other hand, you realize that non-profits are not businesses, and there are fundamental differences between non-profits and businesses, and that there are societal reasons for having non-profits as a different category of organization, then you can make the case for being treated differently. It does a lousy job of explaining to the public that non-profits are inherently more complicated than businesses, and what that means.
7. It routinely asks potential major donors of resources for $7 gifts, instead of $7000 gifts. Resources in this context include money, time and talent.
Three “Bonus” Sins
8. It’s forgotten the concept of the “common good” and what that means to our society at large, look for some areas where we can all agree – my personal suggestion for one area of agreement is literacy – regardless of where one lives, or one’s economic status, it is better for the individual and all of society if you can read than if you can not.
9. It’s almost always jealous of giving to religious organizations, even though the practices that are core to religious institutions would be an anathema to any non-profit – sending out 60 solicitation letters in a year? – (that’s about how many offerings are given in a church setting).
10. It has no clue as to what the term leverage can mean in the non-profit sector.
Bill Huddleston, CFC Expert
Copyright 2008, All Rights Reserved
There’s an interesting online debate about “Philanthrocapitalism” being held on the Global Philanthropy Forum, which is at http://www.philanthropyforum.org/forum/Discussion_Forum1.asp?SnID=2076412520
I have several posts on the discussion, and one that refers to my article about “The Good Samaritan and Performance Measurement” which is here for your convenience:
Is 2000 years long enough to demonstrate results?
Not with today’s performance measurement tools.
It’s also important that you have the right tool for the job, and that’s one of the huge challenges in the non-profit sector. If all you’re doing is selling boxes or sugar water, it’s easy to count how many you’ve sold. I’m also reminded of Abraham Maslow’s quote: “If the only tool you have is a hammer, everything tends to look like a nail.”
If on the other hand, your working on making the world better, it’s a lot harder as my article about “The Good Samaritan and Performance Measurement” shows:
The Good Samaritan & “Performance Measurement”
by Bill Huddleston
Currently, there’s a lot of hype in the world about being “results oriented” and the culture of “performance management” has seeped its way into almost every realm of American life, including business, government and now, the non-profit world as well.
Well, why shouldn’t it? Doesn’t it sound like it’s the only way to be, after all, who could be “against results” or against “performance measurement.” It sounds great, but like the question, “When did you stop beating your wife (or husband)?” it sets the stage in an extremely negative, and skewed fashion.
Let’s use a historical example, the story of the good Samaritan from the Bible is one that I believe is so widely known that it qualifies as a societal story, not just a religious one.
To recap, in the parable a traveler is robbed, beaten, stripped of his clothes and left for dead. Two different people walk by, leaving the robbery victim alone. Then a man from Samaria (the Good Samaritan) comes upon the man, and even though the two different groups hated each other, he stops to render aid.
The Samaritan takes pity on the victim, bandages him, pours oil and wine on his wounds, then puts the victim on his donkey and takes him to an inn and takes care of him. The next day, the Good Samaritan gives the innkeeper two dineri (this was two days wages at the time) and tells the innkeeper, “Look after him, and when I return I will reimburse you for any extra expense you have.” (The story is from Luke 10:29-35).
Now let’s apply modern performance measurement and outcome techniques to this story. With 2000 years of history the story still resonates, how many people have been helped because someone remembered the story of the Good Samaritan and acted in a way that was not perhaps their first impulse? We will never know, and to the performance management crowd, this incident would be recorded today as “too expensive” and “ineffective” – after all, the Samaritan only helped one person. We don’t know if the Samaritan ever came back and paid those extra expenses, and it was two day’s earnings to help just this one person.
It would also received the rating of: “Results Not Demonstrated” – we don’t know if the victim ever recovered, was permanently injured, or had mental impairment due to his injuries. All we know is that he had the crap beat out of him, multiple people walked by, until the “unclean” Samaritan stopped to help.
According to the performance measurement tools, the Good Samaritan “program” was a failure and had no impact.
I think not.
Posted by Bill Huddleston to Philanthrocapitalism at July 8, 2008 8:40 AM
The North Carolina C United Way Board Failed Both the “Smell Test” and the “Optics Test”
The CEO of the United Way of Central Carolinas was given a huge raise, bringing her compensation up to $1.2 million. In particular, her retirement fund was increased six fold to $ 800,000 which has generated a lot of controversy and prompted this post.
I don’t fault the CEO one bit, if any employee was asked “We plan to increase your retirement fund by sixfold, what do you think?”, the answer of course will be “Great idea, Thanks!”
The failure here is for the North Carolina United Way board to not recognize the negative impact that this would have on the non-profit sector. Don’t they know the United Way history with the Aramony scandal?
If she was owed 8 years of back retirement fund payments, that should have been handled separately as an error correction, not a sixfold increase in her retirement account in one year.
BTW, The Combined Federal Campaign (CFC) is the world’s largest workplace giving and there are many safeguards in place to prevent the type of coercion and pressure mentioned about United Way campaigns in some of the other posts on the Philanthropy.com website.
The CFC is also the most donor friendly, and least expensive way for a charity to raise funds.
In terms of actual giving, if the CFC were a foundation it would be the 10th largest foundation in the US. $1 billion of unrestricted gifts over the past five years — how much did your non-profit receive?